Puerto Rico will argue this week that it shouldn’t be treated like a broke business during the proceedings: Its residents, not creditors, should come first, Bloomberg News reported today. Government lawyers will argue with bondholders tomorrow in federal court in San Juan over what ground rules should apply in the forthcoming legal battle at the heart of the $74 billion restructuring.
Puerto Rico in Distress
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While it’s not clear if there are sharks in the waters surrounding Puerto Rico, the island does have sharks of a different kind — ones that hail from mainland hedge funds, municipal bond funds and insurance companies that insure against bond defaults, according to a commentary in the New York Times on Saturday.
Puerto Rico is preparing to seek bids in coming months from private companies willing to operate or improve seaports, regional airports, water meters, student housing, traffic-fine collections, parking spaces and a passenger ferry, according to a government presentation reviewed by The Wall Street Journal.
Puerto Rico's federal oversight board on Friday indicated it may be losing confidence in the local government's resolve in turning the ailing island around, and intimated that employee furloughs could be in the offing, Reuters reported.